PRICE AND YTD RETURN As of 02/05/2016

NAV down $-0.87 $40.86
POP $43.35
YTD Total return at Nav -8.22%

AVERAGE ANNUAL TOTAL RETURNS As of Quarter end 12/31/2015

Sales Charge

1 YEAR RETURN -13.12%
5 YEAR RETURN 5.94%
10 YEAR RETURN 5.46%

KEY STATS

Investment Category Value
Distributions Annually
CUSIP 355 148 305
Fund Number 482
Inception Date Mar 11, 1996
Total Net Assets (all share classes) As of 01/31/2016 $1,914.9 (M)
Distribution Rate at NAV N/A
30-Day Standardized yield N/A

SALES CHARGE, EXPENSES, & FEES As of 03/01/2015 (updated annually)

Gross Expense Ratio 1.14%
Net Expense Ratio 1.14%
Max Initial Sales Charge 5.75%
CDSC 0.00%
12b-1 Fee 0.30%

Fund Description

The fund invests at least 80% of its net assets in the equity securities of small capitalization companies, defined as having market caps under $3.5 billion at the time of purchase.

Strategy Statement

"We seek under-researched, small-cap companies ignored by Wall Street using a bottom-up strategy to find forgotten companies with good growth prospects, strong balance sheets, and bargain valuations."

Steven Raineri, MBA

Management

Steven Raineri, MBA

Steven Raineri, MBA

  • Joined Franklin Templeton in 2005
  • Managed Fund Since 2012
Christopher Meeker, CFA

Christopher Meeker, CFA®

  • Joined Franklin Templeton in 2012
  • Managed Fund Since 2015
Donald Taylor

Donald Taylor

  • Joined Franklin Templeton in 1996
  • Managed Fund Since 1996

Overall Morningstar Rating As of 12/31/2015

Rating Category: Small Value

Morningstar
The fund's overall Morningstar Rating measures risk-adjusted returns and is derived from a weighted average of the performance figures associated with its 3-, 5- and 10-year (if applicable) rating metrics.

Historical Morningstar Rating As of 12/31/2015

Years Ratings Funds
in category
3
2 Stars
373
5
2 Stars
325
10
2 Stars
209

Morningstar Style Box As of 09/30/2015

Strategy, Benefits, Results

Strategy

We are long-term, bottom-up investors looking for companies with solid operating results and trading at attractive valuations. We are bargain seekers looking for $1 worth of value for 80 cents.

We seek small-capitalization companies with the following characteristics:

  • Well managed companies with strong fundamentals that are selling at bargain valuations.
  • Stock prices that are low based on earnings, book value, cash flow or sales relative to the market, a company's industry or a company's earnings record.
  • Recent sharp price declines but the potential for good long-term earning prospects.
  • Valuable intangibles not reflected in the stock price, such as franchises, underused or understated assets or cash, or patents and trademarks.

We are buy-and-hold investors who generally seek to hold an investment for five or more years.

Benefits

  • Small-Cap Exposure. We aim to take advantage of the prospects particular to small-cap companies, which may not exist among larger companies.
  • Broad Market Exposure. We invest in a variety of companies across multiple sectors and industries.
  • Value Expertise. Investors can benefit from our veteran management team with extensive value investing experience.

Investing In The Fund

What Are the Risks?
  • All investments involve risks, including possible loss of principal.
  • Stocks historically have outperformed other asset classes over the long term, but tend to fluctuate more dramatically over the short term.
  • Value securities may not increase in price as anticipated, or may decline further in value.
  • Smaller-company stocks have historically exhibited special risks, including greater price volatility, particularly over the short term.
  • Smaller companies often have relatively small revenues, limited product lines and a small market share.
  • Investments in foreign securities may involve special risks including currency fluctuations and economic and political uncertainty.
  • These and other risks are described more fully in the fund’s prospectus.

Minimum Investment

$1,000.00

How Financial Advisors Help You

Speak to your financial advisor about whether this fund is appropriate for you. If you don't have a financial advisor, request a referral.

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